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HomeMy WebLinkAbout22- Development Agreement - Wild Peach, LLC & Outlaw Real Estate Partners, LLC - Wildlands DEVELOPMENT AGREEMENT (Wild Peach) This DEVELOPMENT AGREEMENT (this “Agreement”) is dated as of January 25, 2022 by and among WILD PEACH, LLC (the “Developer”), OUTLAW REAL ESTATE PARTNERS, LLC (“Outlaw”) and the CITY OF BOZEMAN, MONTANA, 121 N. Rouse Ave., Bozeman, Montana 59771 (the “City”). The Developer, Outlaw and the City are each individually referred to herein as a “Party” and collectively as the “Parties.” RECITALS: WHEREAS, under the provisions of Montana Code Annotated, Title 7, Chapter 15, Parts 42 and 43, as amended (the “Act”), the City is authorized to create urban renewal areas, prepare and adopt an urban renewal plan therefor and amendments thereto, undertake urban renewal projects therein, provide for the segregation and collection of tax increment with respect to property taxes collected in such areas, and apply tax increment revenues derived from projects undertaken within the urban renewal area to pay eligible costs; WHEREAS, pursuant to the Act and Ordinance No. 1655 adopted by the City Commission of the City (the “City Commission”) on November 28, 2005, the City has created the Northeast Urban Renewal District (the “District”) as an urban renewal district and has approved the Northeast Urban Renewal Plan (the “Plan”) as an urban renewal plan in accordance with the Act, which Plan provides for the segregation and collection of tax increment revenues with respect to the District; WHEREAS, the Developer proposes to undertake the construction of a mixed-use development consisting of demolition of a warehouse, underground storage tank, above-ground storage tanks and parking lot addressed as 615 East Peach Street; renovation of a 4,500 square-foot commercial building by converting a second-floor office suite to two two-bedroom dwelling units and converting the existing basement level to storage and accessory office space for the bakery tenant on the first-floor level; new construction of a three-story addition to the existing two-story commercial building at 600 North Wallace Avenue consisting of ground-floor restaurant and retail space and entrance and accessory uses and spaces, second-level dwelling units and office space and a common open space plaza, third-level residences and a rooftop deck; related infrastructure and utility improvements; and related improvements, the current budget for which is set forth on Exhibit A hereto (the “Project”), on land in the District at 600 North Wallace Avenue and 615/629 East Peach Street in Bozeman, Montana, which is legally described on Exhibit B hereto (the “Land”); WHEREAS, the Developer submitted to the Northeast Urban Renewal Board of the City (the “Board”) an application for tax increment assistance with respect to certain eligible costs of the Project; WHEREAS, the Board has approved and recommended that the City Commission approve, subject to the terms and conditions of this Agreement, the application of tax increment assistance with respect to certain eligible costs of the Project; DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B 2 WHEREAS, pursuant to Resolution No. 5370 adopted on January 25, 2022, after a duly called and noticed public hearing, the City Commission approved the Project as an urban renewal project under the Plan and the Act and authorized the use of tax increment revenue of the District to reimburse the Developer for certain eligible costs of the Project described more particularly on Exhibit C hereto (the “Eligible Costs”) in the maximum amount of $583,445, subject to the terms and conditions of this Agreement; and WHEREAS, certain of the Eligible Costs are costs paid by the Developer in connection with the design, engineering, work, construction, materials, equipment, and other improvements eligible to be reimbursed, which improvements are identified as such on Exhibit C hereto (the “Infrastructure Improvements”), and certain of the Eligible Costs are costs to be paid by the Developer as fees or charges pertaining to the Project, which fees and charges are identified as such on Exhibit C hereto (the “Project Fees and Charges”); and WHEREAS, Outlaw, which is the controlling member of the Developer, is under contract to purchase approximately 3 acres of developable property in the District located at 707 Peach Street (such 3 acre parcel collectively referred to herein as “707 Peach Street”), and as a condition to the City’s reimbursing the Developer for Eligible Costs, Outlaw will commit that, once 707 Peach Street is purchased by Outlaw or by a single-purpose entity of which Outlaw is the controlling member, any new development at 707 Peach Street will include a minimum of 3 housing units that are deed restricted or restricted by other mechanism acceptable to the City to be affordable at 120% of area median income, and will record the Restrictive Covenants (as hereinafter defined) against 707 Peach Street; and WHEREAS, the City Commission has determined to reimburse the Developer for Eligible Costs solely out of the Project Generated Tax Increment, as further described herein; and WHEREAS, the Parties desire to enter into this Agreement which sets forth the obligations and commitments of the Parties with respect to the Project, including the Eligible Costs consisting of the costs of the Infrastructure Improvements and of the Project Fees and Charges. NOW, THEREFORE, the City and the Developer, pursuant to the Act, each in consideration of the representations, covenants and agreements of the other, as set forth herein, mutually represent, covenant and agree as follows: Section 1. Definitions; Rules of Interpretation; Exhibits. 1.1. Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context clearly requires otherwise, the following terms have the meanings assigned to them, respectively: “Act” means Montana Code Annotated, Title 7, Chapter 15, Parts 42 and 43, as amended or supplemented. “Affordable Housing Covenants” means the covenants of Outlaw set forth in Section 3.12 hereof. DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B 3 “Agreement” means this Development Agreement, dated as of January 25, 2022, by and among the City, the Developer and Outlaw, as it may be amended or supplemented from time to time in accordance with the terms hereof. “City” means the City of Bozeman, Montana, or any successors to its functions under this Agreement. “City Commission” means the governing body of the City. “Developer” means Wild Peach, LLC, a Montana limited liability company, and its successors and assigns in accordance with and as permitted under this Agreement. “Developer Certificate” means the certificate attached hereto as Exhibit E. “District” means the Northeast Urban Renewal District, an urban renewal district created by the Ordinance pursuant to the Act, as such may be enlarged or reduced from time to time in accordance with the Act. “DOR” means the State of Montana Department of Revenue. “Eligible Costs” means the costs identified as such on the attached Exhibit C. “Environmental Laws and Regulations” means and includes the Federal Comprehensive Environmental Compensation Response and Liability Act (“CERCLA” or the “Federal Superfund Act”) as amended by the Superfund Amendments and Reauthorization Act of 1986 (“SARA”), 42 U.S.C. §§ 9601 et seq.; the Federal Resource Conservation and Recovery Act of 1976 (“RCRA”), 42 U.S.C. §§ 6901 et seq.; the Clean Water Act, 33 U.S.C. § 1321 et seq.; and the Clean Air Act, 42 U.S.C. §§ 7401 et seq., all as the same may be from time to time amended, and any other federal, state, county, municipal, local or other statute, code, law, ordinance, regulation, requirement or rule which may relate to or deal with human health or the environment including without limitation all land use, zoning, and stormwater control regulations as well as all regulations promulgated by a regulatory body pursuant to any statute, code, law, ordinance, regulation, requirement or rule. “Fiscal Year” means the period commencing on the first day of July of any year and ending on the last day of June of the next calendar year, or any other twelve-month period authorized by law and specified by the Commission as the City’s fiscal year. “Indemnified Parties” has the meaning given to it in Section 7.1. “Infrastructure Improvements” means the design, engineering, work, construction, materials, equipment, and the other improvements, the costs of which form a part of the Eligible Costs described as such in Exhibit C hereto, as the same may be amended or supplemented from time to time, in accordance with the terms hereof. “Land” has the meaning given to it in the recitals hereof. DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B 4 “Land Use Regulations” means all federal, state and local laws, rules, regulations, ordinances and plans relating to or governing the development or use of the Land or the Project. “Milestone” of “Milestones” has the meaning given in Section 3.4 hereof. “Milestone Date” or “Milestone Dates” has the meaning given in Section 3.4 hereof. “Ordinance” means Ordinance No. 1655 adopted by the City Commission on November 28, 2005. “Original Resolution” means Resolution No. 4801 adopted by the City Commission on May 22, 2017, pursuant to which the City issued the Series 2017 Bond. “Outlaw” means Outlaw Real Estate Partners, LLC, a Montana limited liability company, and its successors and assigns in accordance with and as permitted under this Agreement. “Person” means any individual, corporation, limited liability company, partnership, limited liability partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. “Prevailing Wage Rates” means the Montana Prevailing Wage Rate for public works projects as published from time to time by and available from the Montana Department of Labor and Industry, Research and Analysis Bureau, P.O. Box 1728, Helena, Montana 59624, telephone number (800) 541-3904. “Project” means the facilities to be constructed by the Developer on the Land pursuant to this Agreement, as described more particularly on the attached Exhibit A. “Project Fees and Charges” means those fees and charges pertaining to the Project that form a part of the Eligible Costs described as such in Exhibit C hereto, as the same may be amended or supplemented from time to time, in accordance with the terms hereof. “Project Generated Tax Increment” means the amounts paid by the Developer in the first five Fiscal Years for which the assessed and taxable values of the Project, as completed, are reflected in the certified taxable values of the City, as further described in Section 5.1(f) hereof. “Restricted Units” has the meaning set forth in Section 3.12 hereof. “Restrictive Covenants” has the meaning set forth in Section 3.12 hereof. “Series 2017 Bond” means the Tax Increment Urban Renewal Revenue Bond, Series 2017 (Northeast Urban Renewal District), issued in the principal amount of $1,446,000 pursuant to the Original Resolution. “State” means the State of Montana. “Tax Increment” means the amount received by the City pursuant to the Act from the extension of levies of Taxes (expressed in mills) against the incremental taxable value (as DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B 5 defined in the Act) of all Taxable Property, and shall include all payments in lieu of Taxes attributable to the incremental taxable value and all payments received by the City designated as replacement revenues for lost Tax Increment. “Taxable Property” means all real and personal property located in the District and subject to Taxes, including land, improvements and equipment. “Taxes” means all taxes levied on an ad valorem basis by any Taxing Body against the Taxable Property (exclusive of the six mill levy for university purposes levied by the State), and shall include all payments in lieu of taxes received by the City with respect to Taxable Property. “Taxing Body” means the City; the County of Gallatin, Montana; High School District No. 7 (Bozeman), Gallatin County, Montana; Elementary School District No. 7 (Bozeman), Gallatin County, Montana; the State; and any other political subdivision or governmental unit that levies or may hereafter levy or cause to be levied Taxes against property within the District. “Unavoidable Delay” means a delay resulting from a cause over which the Party required to perform does not have control and which cannot or could not have been avoided by the exercise of reasonable care, including but not limited to, acts of God, accidents, war, civil unrest, embargoes, strikes, unavailability of raw materials or manufactured goods, litigation, pandemics, epidemics, labor shortages, unusually inclement weather and the delays of the other Party or its contractors, agents or employees in the performance of their duties under or incident to this Agreement. 1.2. Rules of Interpretation. (a) The words “herein,” “hereof” and words of similar import, without reference to any particular section or subdivision, refer to this Agreement as a whole rather than to any of its particular sections or subdivisions. (b) References to any particular section or subdivision hereof are to the section or subdivision of this Agreement in its original signed form, unless otherwise indicated. (c) The word “or” is not exclusive but is intended to contemplate or encompass one, more or all of the alternatives conjoined. 1.3. Exhibits. The following Exhibits are attached to and by reference made a part of this Agreement: Exhibit A: Project Costs Exhibit B: Description of the Land Exhibit C: Eligible Costs Exhibit D: Milestones DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B 6 Exhibit E-1: Form of Developer Certificate to Establish Amount of Eligible Costs Exhibit E-2: Form of Developer Certificate Regarding Project Generated Tax Increment and Request for Reimbursement Exhibit F: Nondiscrimination and Equal Pay Affirmation Exhibit G: Sample Affordable Housing Pricing Matrix Exhibit H: Form of Restrictive Covenants Section 2. Representations. 2.1. City Representations. The City hereby represents as follows: (a) Pursuant to the Act, and after a public hearing duly called and held, the City by the Ordinance has duly created the District. (b) Pursuant to the Original Resolution, the City has issued and there is outstanding the Series 2017 Bond. In the Original Resolution, the City reserved the right to issue obligations having a lien on Tax Increment subordinate to the lien of the Series 2017 Bond (“Subordinate Obligations”). Any obligation of the City to make payments under this Agreement constitutes a Subordinate Obligation under the Original Resolution, subordinate and junior in all respects to the repayment of the Series 2017 Bond and the replenishment of the debt service reserve account for the Series 2017 Bond, and subject to all other terms and conditions of the Original Resolution. (c) Pursuant to Resolution No. 5370 of the City Commission, the City approved the use of Project Generated Tax Increment, if available, to reimburse the Eligible Costs in a total amount not to exceed $583,445. (d) The DOR has advised the City that the base taxable value (as defined in the Act) of the District is $423,054. (e) The City Commission has duly authorized the execution and delivery of this Agreement. 2.2. Developer Representations. The Developer hereby represents as follows: (a) The Developer is a Delaware limited liability company, duly formed, validly existing and in good standing under the laws of the State of Delaware and is duly qualified to do business in the State of Montana. The Developer has the power to enter into this Agreement and by all necessary corporate action has duly authorized the execution and delivery of this Agreement. DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B 7 (b) The Developer has good marketable title to the Land, free and clear of all liens, encumbrances and defects except such as do not materially affect the value of the Land or materially interfere with the use made and proposed to be made of the Land by the Developer. (c) The Developer has the financial capability or commitments to complete the Project at a cost not less than $23,500,000.00. (d) The Developer is not aware of any facts the existence of which would cause the Developer to be in violation in any material respect of any Environmental Laws and Regulations applicable to the Project or the Infrastructure Improvements. The Developer has not received from any local, state or federal official any notice or communication indicating that the activities of the Developer have been, may be or will be in violation of any Environmental Laws and Regulations applicable to the Project or the Infrastructure Improvements. (e) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions hereof is prohibited or limited by, conflicts with or results in a breach of the terms, conditions or provisions of the certificate of formation, partnership agreement or operating agreement of the Developer or any evidence of indebtedness, agreement or instrument of whatever nature to which the Developer is now a party or by which it is bound, or constitutes a default under any of the foregoing. (f) There is no action, suit, investigation or proceeding now pending or, to the knowledge of the Developer, threatened against or affecting the Developer or its business, operations, properties or condition (financial or otherwise) before or by any governmental department, commission, board, authority or agency, or any court, arbitrator, mediator or grand jury, that could, individually or in the aggregate, materially and adversely affect the ability of the Developer to complete the Project. (g) The Developer acknowledges and agrees that the sole source of funds for reimbursing the Developer under this Agreement is the Project Generated Tax Increment. The Developer further acknowledges and agrees the amount of Tax Increment in the District is dependent upon a number of variables, including, without limitation, the taxable value of the Project, the number of mills levied by Taxing Bodies, and then-prevailing state laws regarding computation of Tax Increment, and that the City has no control over such variables. If Tax Increment in the District decreases, the City may need to use Project Generated Tax Increment to pay debt service on the Series 2017 Bond or to replenish the debt service reserve account for the Series 2017 Bond, and there may not be Project Generated Tax Increment available to reimburse the Developer for Eligible Costs, despite the Developer having paid all property taxes then due with respect to the Project. The Developer agrees that if Project Generated Tax Increment is required to be used to pay debt service or replenish the debt service reserve account for the Series 2017 Bond such that the Project Generated Tax Increment is not available to reimburse the Developer, the City shall have no obligation to pay to the Developer the amount of reimbursement described in Section 4. The Developer agrees that such event shall not constitute a default by the City hereunder. In such event, if Developer receives no reimbursement but has recorded the Restrictive Covenants described in Section 3.12, the City shall consent to the termination of the Restrictive Covenant. DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B 8 2.3. Outlaw Representations. Outlaw hereby represents as follows: (a) Outlaw is a Delaware limited liability company, duly formed, validly existing and in good standing under the laws of the State of Delaware and is duly qualified to do business in the State of Montana. Outlaw has the power to enter into this Agreement and by all necessary corporate action has duly authorized the execution and delivery of this Agreement. (b) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions hereof is prohibited or limited by, conflicts with or results in a breach of the terms, conditions or provisions of the certificate of formation, partnership agreement or operating agreement of Outlaw or any evidence of indebtedness, agreement or instrument of whatever nature to which Outlaw is now a party or by which it is bound, or constitutes a default under any of the foregoing. (c) There is no action, suit, investigation or proceeding now pending or, to the knowledge of Outlaw, threatened against or affecting Outlaw or its business, operations, properties or condition (financial or otherwise) before or by any governmental department, commission, board, authority or agency, or any court, arbitrator, mediator or grand jury, that could, individually or in the aggregate, materially and adversely affect the ability of Outlaw to comply with and perform the Affordable Housing Covenants. (d) Outlaw is under contract to purchase 707 Peach Street, and expects to close on the purchase of 707 Peach Street prior to December 2022. Section 3. Developer Undertakings; Outlaw Undertakings. 3.1. Construction and Maintenance of Project. The Developer hereby agrees and commits to the City that it will diligently prosecute to completion the construction of the Project in accordance with this Agreement, the site plan submitted to the City and all applicable federal, State and local laws, rules, regulations, ordinances and plans relating to or governing the development or use of the Project, including applicable Land Use Regulations and Environmental Laws and Regulations. The Developer agrees and commits to the City that construction of the Project shall be completed by December 31, 2023, subject to Unavoidable Delays. The total estimated costs of the Project are shown on Exhibit A hereto. The Developer has the financial capacity to complete the Project, and the Developer agrees to pay all costs thereof. If there is an increase in the costs of the Project from that shown on Exhibit A hereto that cannot be covered by the contingency amount, the Developer shall notify the City of the increase and submit additional evidence in a form acceptable to the City that the Developer has the financial capacity to cover such additional costs and complete the Project. At all times during the term of this Agreement, the Developer will operate and maintain, preserve and keep the Project or cause the Project to be operated, maintained, preserved and kept for the purposes for which it was constructed, and with the appurtenances and every part and parcel thereof, in good repair and condition. The Developer agrees to permit the City and any of its officers, employees or agents access to the Land for the purpose of inspection of all work being performed in connection with the Project; provided, however, that the City shall have no obligation to inspect such work. DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B 9 3.2. Preparation, Review and Approval of Construction Plans. In connection with the Project, the Developer, at its sole expense, shall prepare and submit construction plans, drawings, and related documents for each portion of the Project to the appropriate City officials for architectural, engineering or land use review and written approval or permits. The Developer acknowledges that no review or approval by City officials hereunder may be in any way construed by the Developer to replace, override or be in lieu of any required review, inspection, or approval by the City Planning Division, or any other building construction official review or approvals required by any State laws or local ordinances or regulations. Nothing contained in this Agreement indicates or evidences that the City has approved or will approve the Project or any portion thereof. This Agreement does not affect or limit the City’s regulatory powers with regard to the Project, including, without limitation, those relating to building permits or other permits or the payment of fees. As further described in Section 7.1, the City shall have no liability and the Developer shall hold the City harmless with respect to any increases in costs of the Project related to or arising out of delays resulting from the City’s regulatory actions or approvals. 3.3. Construction of the Infrastructure Improvements. The Developer shall acquire, install, construct or otherwise provide the Infrastructure Improvements. The Developer acknowledges and agrees that the City is not responsible for acquiring, installing, constructing or otherwise providing the Infrastructure Improvements. The estimated costs of the Infrastructure Improvements, which form a part of the Eligible Costs, are shown on Exhibit C hereto. 3.4. Milestones of the Project. Certain steps in the development of the Project are listed on Exhibit D attached hereto (collectively, the “Milestones”; each a “Milestone”), together with the dates by which the Developer is obligated to complete the Milestones (collectively, the “Milestone Dates”; each as it relates to a particular Milestone, the “Milestone Date”). The Developer acknowledges and agrees that the City in reserving or offering to make available Tax Increment to pay or reimburse the Eligible Costs necessarily means that certain Tax Increment is not available to pay or reimburse other undertakings or costs for the benefit of the District and that the City reasonably expects additional Tax Increment as a result of completion of the Project. The Developer acknowledges and agrees that conditioning the availability of Project Generated Tax Increment to pay or reimburse the Eligible Costs on completion or satisfaction of the Milestones by the corresponding Milestone Dates is reasonable. If the Developer is unable to complete or satisfy a Milestone by the corresponding Milestone Date, the Developer shall make a formal written request to the Director of Economic Development, with appropriate supporting material, to extend the Milestone Date and, as appropriate, subsequent Milestone Dates. The Director of Economic Development may, in his or her sole discretion, (i) determine whether such extension is appropriate and, if so, fix a new and superseding Milestone Date and also adjust other subsequent Milestone Dates, along with any other terms or conditions, or (ii) refer the request to the City Commission to either approve the extension and adjust other Milestone Dates, as appropriate, or, in its sole discretion, terminate this Agreement, in which case the City will have no obligation to reimburse the Developer hereunder. 3.5. Prevailing Wage Rates; Competitive Bidding. The Developer understands that the City is obligated to follow certain laws with respect to the expenditure of public funds, which includes Tax Increment. The Developer agrees to comply with laws that govern City contracting obligations, including public procurement laws relating to all of the Infrastructure Improvements, DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B 10 such as, without limitation, laws and rules regarding prevailing wage and solicitation of work on a competitive basis. Without limitation of the foregoing, the Developer agrees that in the awarding of contracts for the Infrastructure Improvements (i) it will, and it will cause its contractor to, publicly bid competitively contracts for each component of the Infrastructure Improvements, and (ii) through its contract with its contractor, it will, in addition to the requirements of Sections 3.9 and 3.10, require its contractor to, pay the Prevailing Wage Rates on such contracts related to the Infrastructure Improvements. The Developer will provide to the City all documentation requested to verify the compliance of the Developer and its contractor with the foregoing requirements. Failure of the Developer or its contractor to bid competitively contracts for each component of the Infrastructure Improvements or to require contracts entered into directly with contractors or sub-contractors to include provisions requiring the contractor or sub-contractor to pay the Prevailing Wage Rates on the work related to the Infrastructure Improvements will be considered a breach of this Agreement and the City will be entitled, at its discretion and without obligation, to exercise any and all measures to assure compliance and retroactive compensation plus interest to workers not paid in accordance with this Agreement, and recovery of any penalty or fine assessed by the State attributed to any failure to pay the Prevailing Wage Rates. Additionally, the Developer acknowledges that a violation of these requirements may, in the City’s sole discretion, cause the Infrastructure Improvements to be ineligible for the application of Tax Increment, in which case the City will have no obligation to reimburse or pay the Developer hereunder. 3.6. Utilities. The Developer shall not interfere with, or construct any improvements over, any public street or utility easement without the prior written approval of the City. All connections to public utility lines and facilities shall be subject to approval of the City and any private utility company involved. The Developer at its own expense shall replace any public facilities or utilities damaged during the Project by the Developer or its agents or by others acting on behalf of or under their direction or control of the Developer. 3.7. Permits and Compliance With Laws. The Developer will obtain, in a timely manner, all required permits, licenses and approvals, and will meet all requirements of all local, state and federal laws, rules and regulations which must be obtained or met in connection with the acquisition and construction of the Project, including the Infrastructure Improvements. Without limiting the foregoing, the Developer will request and seek to obtain from the City or other appropriate governmental authority all necessary land use, zoning, and building permits. The Developer will comply in all material respects with all Environmental Laws and Regulations applicable to the construction, acquisition, and operation of the Project, including the Infrastructure Improvements, will obtain any and all necessary environmental reviews, licenses or clearances under, and will comply in all material respects with, Environmental Laws and Regulations. In addition, the Developer shall comply fully with all applicable state and federal laws, regulations, and municipal ordinances related to worker safety including but not limited to the Occupational Safety and Health Act (OSHA), the safety rules, codes, and provisions of the Montana Safety Act in Title 50, Chapter 71, MCA, all applicable City, County, and State building and electrical codes, and the Americans with Disabilities Act. DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B 11 3.8. Easements. To the extent that the Infrastructure Improvements are to be located on the Land, the Developer hereby agrees to grant to the City and applicable utility companies from time to time such easements, rights-of-way and similar licenses in a form required by the City and as are reasonably necessary to permit the City to own, operate and maintain the Infrastructure Improvements. 3.9. Nondiscrimination and Equal Pay Affirmation. The Developer agrees to require its contractor(s) to be in compliance with the City’s Nondiscrimination and Equal Pay Affirmation attached hereto as Exhibit F, as well as Title 49, Montana Code Annotated, regarding activities related to the Project, including the Infrastructure Improvements. The Developer agrees that in its contracts with its contractors the Developer’s contractor will be required to require its subcontractors to comply with the City’s Nondiscrimination and Equal Pay Affirmation attached hereto as Exhibit F, as well as Title 49, Montana Code Annotated, regarding activities related to the Project. The Developer agrees to provide copies of all such contracts upon request by the City. 3.10. Worker’s Compensation Insurance. The Developer shall provide in its construction contracts related to the Project with all of its respective contractors that such contractors are to be covered by a Worker’s Compensation insurance program with the State, a private insurance carrier, or an approved self-insurance plan in accordance with State law. 3.11. Walkaway Provision. The Developer shall have the option, in its sole discretion and for any reason, to cease developing the Project and terminate this Agreement without penalty at any time prior to the Developer submitting any request for reimbursement or payment to the City (“walkaway provision”). If the Developer exercises this walkaway provision, this Agreement shall immediately terminate and all rights and obligations of the Parties under this Agreement shall cease, except for those rights and obligations specifically identified in this Agreement as surviving termination. If the Developer exercises this walkaway provision, the Developer automatically waives any and all rights to reimbursement or payment from the City under this Agreement. This walkaway provision shall not limit or prohibit any rights, claims, or recourse that the City may have in connection with the Project. The Parties expect that, if the Developer determines to exercise this walkaway provision, the Restrictive Covenants will not be recorded against 707 Peach Street. If Outlaw records the Restrictive Covenants and, at a later date, the Developer determines to exercise the walkaway provision, the City agrees to cooperate with Outlaw to remove the Restrictive Covenants from 707 Peach Street. 3.12. Affordable Housing Covenants. Outlaw agrees that, following the closing of its purchase of 707 Peach Street, any development at 707 Peach Street will include a minimum of 3 housing units (the “Restricted Units”), which will be restricted for a period not less than 30 years for use as housing affordable to households with incomes equal to 120% area median income (“AMI”). As a condition to reimbursement from Project Generated Tax Increment, as described in Section 5.1 hereof, Outlaw shall record the restrictive covenants, substantially in the form attached hereto as Exhibit H (the “Restrictive Covenants”) against 707 Peach Street. The Restrictive Covenants must (i) run with the land, (ii) bind, for a period not less than 30 years, the Restrictive Units to be affordable at 120% AMI, either as rental units or as owner-occupied units with restrictions on resale prices, with resale and rental prices tied to affordability at 120% AMI, and (iii) a third-party nonprofit or government entity with experience in managing affordable DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B 12 housing units must manage the rental or sale of the Restricted Units. For avoidance of doubt, a sample affordability matrix based on AMI is attached as Exhibit G; however, the affordability requirements in the Restrictive Covenants will be index-based, tied to AMI, and pursuant to the Restrictive Covenants, rental and sale/resale prices of the Restricted Units will be based on the most recent affordability data available through the Housing and Urban Development’s Housing Availability Data System or other similar affordability data that is available at the time of rental or sale/resale. Outlaw’s covenants described in this Section 3.12 are referred to herein as the “Affordable Housing Covenants.” Outlaw and the Developer each acknowledge and agree that the Affordable Housing Covenants are fundamental to the City’s agreements hereunder. Outlaw acknowledges that, as development proceeds at 707 Peach Street, it may be required to record other instruments to implement the Affordable Housing Covenants and provide for the affordability of the Restricted Units, in addition to or in replacement of the Restrictive Covenants to be recorded as a condition to reimbursement of the Developer under this Agreement, and Outlaw agrees to record such other instruments if necessary. Outlaw acknowledges that, as determined by the City, one-person household pricing relates to studios, two-person household pricing relates to one bedroom units, three-person household pricing relates to two bedroom units, and four-person household pricing relates to three bedroom units. Section 4. City Undertakings. Subject to satisfaction of all conditions in Section 5 below, and solely from Project Generated Tax Increment, subject to the prior lien of the Series 2017 Bond and the debt service reserve account therefor, the City agrees to reimburse the Developer in an amount equal to the lesser of (i) the amount of the Eligible Costs (not to exceed $583,445), or (ii) the Project Generated Tax Increment. Section 5. Reimbursement for the Eligible Costs. Reimbursement of the Developer for Eligible Costs shall be subject to the following conditions and in accordance with the following procedures: 5.1. Conditions to Reimbursement. (a) (i) The Developer must have completed or satisfied each of the Milestones by the applicable Milestone Date, as such date may have been extended pursuant to Section 3.4 hereof, (ii) the City must have issued a certificate of occupancy for the Project, (iii) the Infrastructure Improvements must have been completed in their entirety and the City must have delivered to the Developer written acceptance of the Infrastructure Improvements (which may be in the form of a Certificate of Completion or such other format as required by the City), and (iv) the Developer must demonstrate to the City’s satisfaction, by a title report or other means acceptable to the City, that the Infrastructure Improvements are free of financial liens and any encumbrances affecting the Infrastructure Improvements must be acceptable to the City. (b) Reimbursement by the City for costs of the Infrastructure Improvements must be based on paid invoices for costs incurred by the Developer, its contractors and subcontractors or utility companies, which the Developer must supply to the City. The City may reject, in its sole discretion, any invoice related to the Infrastructure Improvements. The City will notify the Developer of any rejected invoice and the reason it was rejected. DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B 13 (c) The Parties agree that the City will have no obligation to pay or reimburse any of the Eligible Costs unless at the time of such request (i) all of the Developer’s representations as set forth in Section 2.2 are true and correct, (ii) the Developer is not in breach of any covenant or undertaking as set forth in Section 3, and (iii) there shall be adequate Tax Increment on hand to satisfy all financial obligations related to the Series 2017 Bond and the debt service reserve account for the Series 2017 Bond such that Project Generated Tax Increment is available to reimburse the Developer. (d) The Developer and/or Outlaw shall have provided evidence satisfactory to the City of Outlaw’s compliance with the Affordable Housing Covenants and the Restrictive Covenants, which shall include evidence that the Restrictive Covenants have been recorded with the Gallatin County Clerk and Recorder’s Office and, if development has proceeded at 707 Peach Street, shall include other information regarding the Restricted Units, which may include the recorded forms of the deeds to the Restricted Units, closing statements prepared by a third-party escrow agent, outreach and marketing materials relating to the rental or sale of the affordable housing units, rental and/or sale data relating to the Restricted Units, and/or other relevant information. (e) After receiving a certificate of occupancy for the Project, the Developer shall provide to the City a signed Developer certificate substantially in the form attached as Exhibit E-1 hereto and acceptable to the City, accompanied by the invoices and lien waivers from the contractors or subcontractors that have performed the work to be reimbursed. In addition, the Developer agrees to provide to the City any additional information requested by the City for the City to determine whether the Developer’s request for reimbursement complies with this Agreement. Based on this Developer certificate and the related information provided by the Developer, the City Manager or his or her designee shall determine the total dollar amount of Eligible Costs that may be reimbursed (up to $583,445). (f) The Developer or other person(s) or entity responsible for paying such taxes, shall have paid property taxes with respect to the Project for two full Fiscal Years after the assessed and taxable values of the Project, as completed, are reflected in the certified taxable values of the City provided by the Department of Revenue. For example, if the Project is completed in April 2023, the value of the Project as completed will be assessed by the Department of Revenue in January 2024; included in certified values provided to the City in August 2024; and the Developer must pay property taxes due November 30, 2024, May 31, 2025, November 30, 2025 and May 31, 2026 (fiscal years 2024/25 and 2025/26) before it is eligible for reimbursement. The amounts paid by the Developer in the first five Fiscal Years for which the assessed and taxable values of the Project, as completed, are reflected in the certified taxable values of the City constitute the “Project Generated Tax Increment.” If any of the above conditions are not satisfied in the determination of the City, the City shall have no obligation to reimburse any of the Eligible Costs and the City’s determination to refrain from reimbursing, or its inability to reimburse, any of the Eligible Costs shall not be or result in a default of this Agreement. DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B 14 5.2. Process for Reimbursement. (a) Following determination of the dollar amount of the Eligible Costs that may be reimbursed under Section 5.1(e), and the Developer’s payment of property taxes relating to the Project as completed for two full Fiscal Years, as described under Section 5.1(f) above, Developer shall submit to the Director of Economic Development a certificate substantially in the form attached hereto as Exhibit E-2, together with such supporting documentation as may be requested by the City, showing the amount of the Project Generated Tax Increment paid by the Developer at that time. (b) The Parties expect that the Project Generated Tax Increment generated in the first two Fiscal Years after the assessed and taxable values of the Project, as completed, are reflected in the certified taxable values of the City will be sufficient to reimburse the Developer in full for the Eligible Costs (up to $583,445). However, if the Project does not generate sufficient Project Generated Tax Increment to reimburse the Developer in full for the Eligible Costs (up to $583,445) in the first two Fiscal Years after the full assessed and taxable values of the Project, as completed, are reflected in the City’s certified values, the Developer may submit additional certificates and requests for reimbursement, substantially in the form attached hereto as Exhibit E-2. Such certificates may be submitted not more than twice in any Fiscal Year. If the Project Generated Tax Increment has not been sufficient to reimburse the Developer in full for the Eligible Costs (up to $583,445) by the end of the fifth Fiscal Year after the assessed and taxable values of the Project, as completed, are reflected in the certified taxable values of the City, this Agreement shall terminate and the Developer is not eligible for additional reimbursement. Section 6. Covenants to Pay Taxes. 6.1. Taxes. The Developer, or, following completion of the Project and the establishment of the Project as a condominium, the condominium owners’ association, as the Developer’s successor and assign under this Agreement (the “Condominium Owners’ Association”), shall pay or cause to be paid when due and prior to the imposition of penalty all Taxes and all installments of any special assessments payable with respect to the Land and the Project and any improvements thereto or extension thereof. 6.2. Maintenance of Land and Project. The Developer, for itself and its successors and assigns, including the Condominium Owners’ Association or other future owners of the Land and the Project, agrees to use its commercially reasonable best efforts to maintain and operate the Land and the Project so as to be able at all times to pay promptly and when due all property taxes levied with respect to the Land and the Project. 6.3. Injunction; Specific Performance. The Parties agree that, in the event of a breach of this Section 6 by the Developer or its successors or assigns, the City would suffer irreparable harm. Therefore, in the event the Developer or its successors or assigns fails to comply with the provisions of this Section 6, the Developer agrees that the City may pursue any remedy at law or in equity, including, without limitation, the remedies of injunction and specific performance. DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B 15 Section 7. Indemnification and Insurance. 7.1. Indemnification. The Developer releases the City and all City Commission members, board members, officers, agents, servants and employees of the City (the “Indemnified Parties”) from, and covenants and agrees that the Indemnified Parties shall not be liable for, and agrees to indemnify, defend and hold harmless the Indemnified Parties against, any loss, damage, cost (including reasonable attorneys’ fees), claim, demand, suit, action or other proceeding whatsoever (i) arising or purportedly arising out of, or resulting or purportedly resulting from, the acquisition and construction of the Project, including the Infrastructure Improvements, any violation by the Developer of any agreement, condition or covenant of this Agreement, the ownership, maintenance and operation of the Project, or the presence on any portion of the Land, of any dangerous, toxic or hazardous pollutants, contaminants, chemicals, waste, materials or substances; or (ii) which is proximately caused by the Developer or its officers, agents, contractors, consultants or employees. 7.2. Insurance. Developer, or, following completion of the Project, the Condominium Owners’ Association, shall keep and maintain the Project at all times insured against such risks and in such amounts, with such deductible provisions, as are customary in connection with facilities of the type and size comparable to the Project, and the Developer, or the Condominium Owners’ Association, shall carry and maintain, or cause to be carried and maintained, and pay or cause to be paid timely the premiums for direct damage insurance covering all risks of loss, including, but not limited to, the following: 1. fire 2. extended coverage perils 3. vandalism and malicious mischief 4. boiler explosion (but only if steam boilers are present) 5. collapse on a replacement cost basis in an amount equivalent to the Full Insurable Value thereof. “Full Insurable Value” shall include the actual replacement cost of the Project, exclusive of foundations and footings, without deduction for architectural, engineering, legal or administrative fees or for depreciation. The policies required by this Section 7.2 shall be subject to a no coinsurance clause or contain an agreed amount clause, and must contain a deductibility provision not exceeding $100,000. Subject to the terms of any mortgage relating to the Project, policies of insurance required by this Section 7.2 shall insure and be payable to Developer or the Condominium Owners’ Association and shall provide for release of insurance proceeds to Developer or the Condominium Owners’ Association for restoration of loss. The City shall be furnished certificates showing the existence of such insurance. In case of loss, Developer or the Condominium Owners’ Association is hereby authorized to adjust the loss and execute proof thereof in the name of all parties in interest. During construction of the Project, any and all of the foregoing insurance policies may be maintained by the Developer’s contractor; provided that once the Project is placed into service, Developer or the Condominium Owners’ Association shall maintain all of the foregoing DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B 16 insurance policies. In addition, as a condition to placing the Project in service, the City may require that the Developer or owner of the Project obtain additional insurance that would protect the City or the City’s interest in the Infrastructure Improvements. In addition to and independent of the above, the Developer shall at the Developer’s expense secure liability insurance through an insurance company or companies duly licensed and authorized to conduct insurance business in Montana. The insurance shall not contain any exclusion for liabilities specifically assumed by the Developer in this Section. The insurance shall cover and apply to all claims, demands, suits, damages, losses, and expenses that may be asserted or claimed against, recovered from, or suffered by the City in relation to construction of the Project and the Infrastructure Improvements without limit and without regard to the cause therefore. The Developer must furnish to the City an accompanying certificate of insurance and accompanying endorsements in amounts not less than as follows: Commercial General Liability - $1,000,000 per occurrence; $2,000,000 annual aggregate The above amounts shall be exclusive of defense costs. The City, its officers, agents, and employees, shall be endorsed as an additional or named insured on a primary non-contributory basis on the Commercial General Liability policy. The insurance and required endorsements must be in a form suitable to City and shall include no less than a thirty (30) day notice of cancellation or non-renewal. The City must approve all insurance coverage and endorsements prior to the Developer commencing work on Project or Infrastructure Improvements. Developer must notify the City within two (2) business days of Developer’s receipt of notice that any required insurance coverage will be terminated or Developer’s decision to terminate any required insurance coverage for any reason. Section 8. General Provisions. 8.1. Conflicts of Interest; City’s Representatives Not Individually Liable. The Developer represents that it does not employ, retain, or contract with an officer or employee of the City and that no member, officer or employee of the City has a personal or financial interest, direct or indirect, in this Agreement or in the Project, or a financial interest in the Infrastructure Improvements. No member, officer or employee of the City shall be personally liable to Developer in the event of any default under or breach of this Agreement by the City, or for any amount that may become due to Developer for any obligation issued under or arising from the terms of this Agreement. 8.2. Rights Cumulative. The rights and remedies of the Parties of this Agreement, whether provided by law or by this Agreement, shall be cumulative, and the exercise by any Party hereto of any one or more of such remedies shall not preclude the exercise by such Party, at the same or different times, of any other remedy for the same default or breach or of any of its remedies for any other default or breach of the Party subject to the limitation of remedies provided herein. No waiver made by such Party with respect to the performance or the manner or time thereof, of any obligation under this Agreement, shall be considered a waiver with respect to the particular obligation of the other Party or a condition to its own obligation beyond those expressly waived in writing and to the extent thereof, or a waiver in any respect in regard DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B 17 to any other rights of the Party making the waiver of any obligations of the other Party. Delay by a Party hereto instituting or prosecuting any cause of action or claim hereunder shall not be deemed a waiver of any rights hereunder. 8.3. Term of Agreement. (a) This Agreement shall remain in effect until the earlier of (i) the date that is 10 days after the date the City reimburses the Developer in full hereunder, or (ii) the termination of this Agreement pursuant to Section 5.2(b) or pursuant to Section 3.11; provided that this Agreement may be earlier terminated by the City in its sole discretion at any time after failure by the Developer to complete or satisfy a Milestone by the applicable Milestone Payment Date (as such date may be extended as described in Section 3.4). (b) Notwithstanding the foregoing provisions of this Section 8.3, (i) Sections 6, 7, and 8 of this Agreement shall in all events survive the termination of this Agreement, and (ii) if the Developer is reimbursed under this Agreement, Section 3.12 shall survive the termination of this Agreement. 8.4. Limitation on City Liability. No agreements or provisions contained in this Agreement nor any agreement, covenant or undertaking by the City contained in any document in connection with the Project, including the Infrastructure Improvements, or the Eligible Costs shall give rise to any pecuniary liability of the City or a charge against its general credit or taxing powers, or shall obligate the City financially in any way except with respect to then-available Project Generated Tax Increment. No failure of the City to comply with any term, condition, covenant or agreement herein shall subject the City to liability for any claim for damages, costs or other financial or pecuniary charge except to the extent that the same can be paid or recovered from then-available Project Generated Tax Increment; and no execution on any claim, demand, cause of action or judgment shall be levied upon or collected from the general credit, general funds or taxing powers of the City (except as such constitute then-available Project Generated Tax Increment). Nothing herein shall preclude a proper party in interest from seeking and obtaining specific performance against the City for any failure to comply with any term, condition, covenant or agreement herein; provided that no costs, expenses or other monetary relief shall be recoverable from the City except as may be payable from the Project Generated Tax Increment. This Agreement shall not constitute or be construed to give rise to a debt of the City. 8.5. Assignment. This Agreement is unique among the City, the Developer and Outlaw and no Party may assign any rights or privileges, or delegate any duties or obligations under this Agreement, without first obtaining the written consent of the other Party. Notwithstanding, Outlaw may assign its interest in and delegate its duties under this Agreement to a related entity that may be created for the purchase of 707 Peach Street, with written notice to the City identifying such successor entity. 8.6. Successors Bound By Agreement; No Third Party Beneficiary; No Property Interest. Subject to compliance with Section 8.5, this Agreement will inure to the benefit of and be binding upon the Parties to this Agreement and their respective successors in interest and permitted assignees. This Agreement is for the exclusive benefit of the Parties, does not DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B 18 constitute a third-party beneficiary agreement, and may not be relied upon or enforced by a third party. This Agreement, by itself, does not create or give rise to a property interest in the Land or the Project. 8.7. Prior Agreements. This Agreement supersedes, merges and voids any and all prior discussions, negotiations, agreements and undertakings between the Parties with respect to the subject matter of this Agreement. The Parties waive and release each other from any claims, actions, or causes of action that relate in any manner to any prior discussions, negotiations, agreements and undertakings between the Parties with respect to the subject matter of this Agreement. 8.8. Entire Agreement. This Agreement, including any exhibits and attachments hereto, embodies the entire agreement and understanding of the Parties with respect to its subject matter. All Parties shall be prohibited from offering into evidence in any arbitration or civil action any terms, conditions, understandings, warranties, statements or representations, whether oral or written, with respect to the subject matter of this Agreement and that are not contained in this Agreement. 8.9. Amendments, Changes and Modifications. This Agreement may be amended and any of its terms may be modified only by written amendment authorized and signed by the Parties hereto. 8.10. Headings. The headings of articles and sections in this Agreement are inserted for convenience of reference only and do not limit or amplify the terms and provisions of the Agreement in any manner. The headings will be ignored and will not affect the construction of any provisions of this Agreement. 8.11. Notice. Any formal notice, demand or communication required or permitted by the terms of this Agreement to be given to the City, the Developer or Outlaw will be in writing and will be delivered to such Party either: (i) by personal hand-delivery; or (ii) by depositing the same in the United States mail, certified mail with return receipt requested, addressed to such Party at the address named below, with postage prepaid thereon. Notice will be deemed complete upon receipt of the notice pursuant to any of the foregoing methods of notice. If to City: City of Bozeman Attention: Bozeman City Manager 121 N. Rouse Ave. P.O. Box 1230 Bozeman, MT 59771 With a copy to: City of Bozeman Attention: Economic Development Director 121 N. Rouse Ave. DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B 19 P.O. Box 1230 Bozeman, MT 59771 If to Developer: Wild Peach, LLC Attention: Steve Borup & Ryan Kulesza P.O. Box 161236 Big Sky, MT 59016 If to Outlaw: Outlaw Real Estate Partners, LLC Attention: Steve Borup & Ryan Kulesza P.O. Box 161236 Big Sky, MT 59016 With Copy to: Holly March Summers March Law, P.C. 517 S. 22nd Avenue, Suite 1 Bozeman, MT 59718 The City, the Developer and Outlaw, by notice given hereunder, may designate different addresses to which subsequent notices, certificates or other communications should be sent. 8.12. Severability. If any provision of this Agreement is declared void or held invalid, such provision will be deemed severed from this Agreement and the remaining provisions of this Agreement will otherwise remain in full force and effect. 8.13. Duplicate Originals or Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement. 8.14. Place of Performance. The place of performance of this Agreement will be in the City of Bozeman, Gallatin County, Montana. 8.15. Governing Law. This agreement and the legal relations between the Parties hereto will be governed by and construed in accordance with the laws of the State of Montana, without giving effect to any choice of law statutes, rules, or principles. 8.16. Dispute Resolution. (a) Any claim, controversy, or dispute between the Parties, their agents, employees, or representatives shall be resolved first by negotiation between senior-level personnel from each Party duly authorized to execute settlement agreements. Upon mutual agreement of the Parties, DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B 20 the Parties may invite an independent, disinterested mediator acceptable to the Parties to assist in the negotiated settlement discussions. (b) If the Parties are unable to resolve the dispute within thirty (30) days from the date the dispute was first raised, then such dispute may only be resolved in a court of competent jurisdiction in compliance with the applicable law and the provisions of this Agreement. 8.17. Further Assurances and Corrective Instruments. The Parties agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Project, including the Infrastructure Improvements, or the Eligible Costs or for carrying out the expressed intention of this Agreement. 8.18. Reports/Accountability/Public Information. The Developer agrees to develop and/or provide documentation as requested by the City demonstrating the Developer’s compliance with the requirements of this Agreement. The Developer shall allow the City, its auditors, and other persons authorized by the City to inspect and copy its books and records for the purpose of verifying that the monies reimbursed to the Developer pursuant to this Agreement were used in compliance with this Agreement and all applicable provisions of federal, state, and local law. The Developer shall not issue any statements, releases or information for public dissemination regarding this Agreement or the work contemplated hereunder without prior written approval of the City. [Balance of page intentionally left blank] DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B 21 IN WITNESS WHEREOF, the Parties hereto have caused this Development Agreement to be executed as of the 25th day of January, 2022. CITY OF BOZEMAN, MONTANA By: _______________________________________ Printed Name: Jeff Mihelich Title: City Manager [Signature Page to Development Agreement] DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B 22 WILD PEACH, LLC By: Name: Title: [Signature Page to Development Agreement] DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B Mike Magrans Managing Partner 23 OUTLAW REAL ESTATE PARTNERS, LLC By: Name: Title: [Signature Page to Development Agreement] DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B Managing Partner Mike Magrans A-1 EXHIBIT A PROJECT COSTS Description of Cost Cost Land & Building Purchase Price $ 3,400,000 Associated Acquisition Costs 59,000 Soft Costs 1,787,920 Hard Costs 15,909,756 G&A 796,558 Marketing 100,000 Contingency 508,699 Interest Reserve 705,567 Loan Fees 232,500 Total $ 23,500,000 DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B B-1 EXHIBIT B LEGAL DESCRIPTION OF THE LAND DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B C-1 EXHIBIT C ELIGIBLE COSTS Infrastructure Improvements: Demolition of Existing Structures $ 98,000.00 Sidewalks, curbs, gutters, pedestrian mall and alley 250,000.00 Public/utility infrastructure 30,000.00 Communications infrastructure—fiber 20,000.00 Project Fees and Charges: Impact fees 171,250.68 Cash in lieu of water rights 14,194.80 Total Eligible Costs: $ 583,445.48 DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B D-1 EXHIBIT D MILESTONES MILESTONE MILESTONE DATE Site Plan Submittal to the City August 27, 2021 – completed Development Building Permit Submittal February 18, 2022 – completed Start of Development Construction May 11, 2022 Start of Infrastructure Construction June 1, 2022 Completion of Infrastructure Substantial Construction November 1, 2023 Completion of Development Construction (occupancy) December 31, 2023 DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B E-1-1 EXHIBIT E-1 FORM OF DEVELOPER CERTIFICATE TO ESTABLISH AMOUNT OF ELIGIBLE COSTS TO: City of Bozeman, Montana FROM: Wild Peach, LLC (the “Developer”) SUBJECT: Eligible Costs This Developer Certificate requests $_________ for reimbursement of Eligible Costs, as defined in the Development Agreement among the Developer, Outlaw Real Estate Partners, LLC and the City of Bozeman, Montana, dated as of January 25, 2022 (the “Development Agreement”). Capitalized terms used but not otherwise defined herein shall have the respective meanings given such terms in the Development Agreement. Pursuant to Section 5.1(d) of the Development Agreement, the undersigned hereby certifies on behalf of the Developer that: (a) the expenditures for which reimbursement is requested are listed in summary form in the attached schedule headed “Project Expenditures;” (b) invoices paid by the Developer corresponding to the expenditures set forth on the attached Project Expenditures Schedule are appended to the attached schedule headed “Project Invoices;” (c) the amounts for which reimbursement is requested have been paid by the Developer to the City for Project Fees and Charges or to contractors, subcontractors, materialmen, engineers, architects or other persons who or that have performed necessary or appropriate services or supplied necessary or appropriate materials for the acquisition, construction, renovation, equipping, and installation of the Infrastructure Improvements; (d) with respect to the Infrastructure Improvements, the contractor and subcontractors were solicited and retained competitively and all persons performing work on the Infrastructure Improvements were paid the Montana prevailing wage for such work; (e) the reimbursement of the amounts requested will not result in a breach of any of the covenants of the Developer contained in the Development Agreement; and (f) no litigation has been instituted or is threatened with regard to any amounts sought to be reimbursed, and binding and enforceable lien waivers have been obtained from all contractors, subcontractors, materialmen, and others with regard to all work related to any amounts for which reimbursement is requested. The Developer represents that all of the representations of the Developer in Section 2.2 of the Development Agreement are true and correct as of the date hereof and the Developer is not in default of the performance of any of its undertakings or obligations under Section 3 of the Development Agreement as of the date hereof. DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B E-1-2 Dated: _____________, 20__ Wild Peach, LLC By: Authorized Developer Representative DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B E-2-1 EXHIBIT E-2 FORM OF DEVELOPER CERTIFICATE REGARDING PROJECT GENERATED TAX INCREMENT TO: City of Bozeman, Montana FROM: Wild Peach, LLC (the “Developer”) SUBJECT: Project Generated Tax Increment This Developer Certificate relates to Project Generated Tax Increment, as defined in the Development Agreement among the Developer, Outlaw Real Estate Partners, LLC and the City of Bozeman, Montana, dated as of January 25, 2022 (the “Development Agreement”). Capitalized terms used but not otherwise defined herein shall have the respective meanings given such terms in the Development Agreement. Pursuant to Section 5.2 of the Development Agreement, the undersigned hereby certifies on behalf of the Developer that on [[___________], 20__, [___________], 20__, [___________], 20__ and [___________], 20__], the Developer, and/or person(s) or entity responsible for paying taxes, has paid property taxes relating to the Project in the total amount of $[______]. The Developer has attached proof of each payment to this certificate. The Developer is eligible to be reimbursed for $[______]1 in total Eligible Costs. [The Developer has previously been reimbursed for Eligible Costs in the amount of $[_____], and as of the date hereof, the Developer is eligible to be reimbursed for an additional $[_______] in Eligible Costs.]2 The Developer further certifies that all of the representations of the Developer in Section 2.2 of the Development Agreement are true and correct as of the date hereof and the Developer is not in default of the performance of any of its undertakings or obligations under Section 3 of the Development Agreement as of the date hereof. Dated: _____________, 20__ Wild Peach, LLC By: Authorized Developer Representative 1 [Should be the lesser of total Project Generated Tax Increment in the paragraph above or established amount of Eligible Costs (not to exceed $[583,445]).] 2 To be used for additional requests pursuant to Section 5.2(b). DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B F-1 EXHIBIT F DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B G-1 EXHIBIT G Sample Affordable Housing Pricing Matrix DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B G-1 EXHIBIT H [Form of Affordable Housing Restrictive Covenant and Agreement] DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B When Recorded Return to: City of Bozeman City Clerk PO Box 1230 Bozeman, MT 59771-1230 AFFORDABLE HOUSING RESTRICTIVE COVENANT AND AGREEMENT THIS AFFORDABLE HOUSING RESTRICTIVE COVENANT AND AGREEMENT (“Restrictive Covenant”) made and entered into this ______ day of ________________, 20__, by and between the CITY OF BOZEMAN, a self-governing municipal corporation organized and existing under its Charter and the laws of the State of Montana with offices at 121 N. Rouse Avenue, Bozeman, Montana 59771-0640, hereinafter referred to as “City”, and [____________] located at P.O. Box 161236, Big Sky, MT 59716, hereinafter referred to as “Owner” and together with the City referred to as the “Parties.” This Restrictive Covenant applies to the real property (“Property”) the legal description of which follows: Lots 1-8 and 11-28 in Block 100 of the Northern Pacific Addition to the City of Bozeman, according to the plat thereof on file and of record in the office of the Gallatin County Clerk and Recorder’s Office, Gallatin County, Montana RECITALS: WHEREAS, it is the intent and purpose of the Owner to meet the conditions of the Development Agreement (“Agreement”) entered into between the City, Wild Peach, LLC (“Wild DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B Affordable Housing Restrictive Covenant and Agreement Page 2 of 7 Peach”) and a [related entity, Outlaw Real Estate Partners, LLC (“Outlaw”)] in relation to the development of the Wildlands Project (Application No. ______) by Wild Peach; and WHEREAS, in order to enhance the long-term affordability of the Northeast Neighborhood, [Owner][Outlaw] and Wild Peach entered into the Agreement with the City of Bozeman stipulating that Wild Peach will be reimbursed from tax increment revenues of the City for a portion of the eligible costs of the Wildlands Project only if, among other requirements and subject to the terms and conditions of the Agreement, Owner agrees to place a restrictive covenant on the Property requiring any development of the Property to include a minimum of 3 affordable housing units; and WHEREAS, Owner agrees that it receives a significant benefit from the Agreement, as [the controlling member of Wild Peach][an entity with the same controlling member as Wild Peach]; and WHEREAS, the parties have determined that it is in the best interests of the City and Owner, and in furtherance of the public health, safety and welfare of the community to enter into and implement this Restrictive Covenant. IN CONSIDERATION of the mutual covenants and agreements herein contained, the parties hereto agree as follows: 1. Recitals Incorporated by Reference. The above recitals are true and correct, and are incorporated by reference herein and made a part hereof. 2. Affordable Housing Requirement. The Owner hereby covenants and agrees that any development of the Property will include a minimum of three (3) residential housing units, restricted by this Restrictive Covenant throughout the term of this Restrictive Covenant for use as “Affordable Housing Units,” as defined below. The Affordable DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B Affordable Housing Restrictive Covenant and Agreement Page 3 of 7 Housing Units may be operated either as rental units or owner occupied units with restrictions on resale prices, in the discretion of the Owner. Affordable Housing Units are defined as housing units that are affordable to households with income equal to 120% of the area medium income (“AMI”). Rental and sale/resale prices of the Affordable Housing Units shall be based on the most recent affordability data available through the Housing and Urban Development’s Affordability Data System for Bozeman or similar affordability data available at the time of rental or sale/resale. As development of the Property proceeds, the Owner will record additional instruments clarifying which residential housing units developed on the Property constitute the Affordable Housing Units. One-person household pricing relates to studios, two-person household pricing relates to one bedroom units, three-person household pricing relates to two bedroom units, and four-person household pricing relates to three bedroom units. 3. Enforcement. Owner agrees this Restrictive Covenant is a binding agreement between Owner and the City, and that the City benefits by and may enforce this Restrictive Covenant against the Owner or its successors in interest or assigns to any of the Property subject to this Restrictive Covenant. The City shall not be liable in the event Owner or Owner’s agent or a successor or assign of either terminates the tenancy of or refuses to renew the lease of a tenant of an Affordable Housing Unit or in the event the Owner fails to comply with the Montana Residential Landlord and Tenant Act or other applicable laws or regulations. DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B Affordable Housing Restrictive Covenant and Agreement Page 4 of 7 4. Satisfaction of Condition of Approval. The City agrees that execution, recordation, performance of, and compliance with this Restrictive Covenant shall constitute performance of Wild Peach, LLC’s and Owner’s obligation to provide an affordable housing restrictive covenant under the Agreement. 5. Term. This Restrictive Covenant shall remain in place and be enforceable for thirty (30) years from the date of the filing of this Restrictive Covenant with the Gallatin County Clerk and Recorder or so long as the Property remains residential in nature, whichever is longer. This Restrictive Covenant may not be removed prior to its natural expiration without the prior written consent of the Bozeman City Commission. 6. Monitoring and Reporting. During the term of this Restrictive Covenant Owner will separately contract with an affording housing agency to provide initial and annual income qualification of tenants, ongoing compliance monitoring, and an annual report to the Owner and City demonstrating compliance with this Restrictive Covenant. If such separate contract terminates for any reason during the term of this Restrictive Covenant, Owner agrees to inform the Community Development Director in writing within ten (10) days of termination, informing the Community Development Director of Owner’s plan for renewed compliance with this requirement. 7. Recording. This Restrictive Covenant must be filed and recorded with the Gallatin County Clerk and Recorder prior to the reimbursement of Wild Peach under the terms of the Agreement. 8. Governing Law and Venue. This Restrictive Covenant shall be construed under and governed by the laws of the state of Montana. In the event of litigation, venue is in the Eighteenth Judicial District Court, in and for County of Gallatin, State of Montana. DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B Affordable Housing Restrictive Covenant and Agreement Page 5 of 7 9. Compliance with Laws. The Owner shall comply with all applicable federal, state and City laws and regulations, including the Montana Residential Landlord and Tenant Act, §§ 70-24-101 et seq., MCA, if applicable. 10. Attorney’s Fees. In the event it becomes necessary for either party to this Restrictive Covenant to retain an attorney to enforce any of its terms or conditions, then the prevailing party shall be entitled to reasonable attorney’s fees and costs, to include the salary and costs of in-house counsel including City Attorney. 11. Waiver. No waiver by either party of any breach of any term, covenant or agreement shall be deemed a waiver of the same or any subsequent breach of this same or any other term, covenant or agreement. No covenant, term or agreement shall be deemed waived by either party unless waived in writing. 12. Nondiscrimination. The Owner shall not discriminate on the basis of race, color, religion, creed, political ideas, sex, age, marital status, national origin, actual or perceived sexual orientation, gender identity, physical or mental disability in the lease, use or occupancy of the Property or any portion thereof or in connection with the employment of persons for the operation and management of the Property or any portion thereof. 13. Invalid Provision. The invalidity or unenforceability of any provision of this Restrictive Covenant shall not affect the other provisions hereof, and this Restrictive Covenant shall be construed in all respects as if such invalid or unenforceable provision were omitted. 14. No Agency. Nothing in this Restrictive Covenant shall be deemed to create an agency, partnership, joint venture or employment relationship between the City and Owner. DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B Affordable Housing Restrictive Covenant and Agreement Page 6 of 7 15. Modifications. No modifications or amendment of this Restrictive Covenant shall be valid unless evidenced by a writing signed by the parties hereto and recorded against the Property. 16. Entire Agreement. This Restrictive Covenant constitutes the entire agreement of the Parties relating to the subject matter addressed in this Restrictive Covenant. This Restrictive Covenant supersedes all prior communications, contracts, or agreements between the Parties with respect to the subject matter addressed in this Restrictive Covenant, whether oral or written. 17. Successors. This Restrictive Covenant shall be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective heirs, successors and assigns and specifically to any subsequent purchaser of the Property. 18. Covenants to Run with the Land. The Parties intend that the terms of this Restrictive Covenant shall be covenants running with the land and shall continue in effect with respect to the entire Property notwithstanding any partition or division of the Property. 19. No Third Party Beneficiary. The terms and provisions of this Restrictive Covenant are intended solely for the benefit of each party and their respective successors and assigns. It is not the parties’ intent to confer third party beneficiary rights upon any other person or entity. Owner affirms that it owns fee title to the Property and has authority to enter into this Restrictive Covenant and to bind itself to the terms herein. 20. Remedies. In the event Owner or its successors or assigns fails to comply with this Restrictive Covenant, the City may pursue any remedy at law or in equity, including, without limitation, the remedies of injunction and specific performance. DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B Affordable Housing Restrictive Covenant and Agreement Page 7 of 7 IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed the day and year first above written. [_________________] By:_______________________________________ Title:_____________________________________ STATE OF MONTANA ) :ss COUNTY OF GALLATIN ) On this ______ day of ________________, 20___, before me, the undersigned, a Notary Public for the State of Montana, personally appeared_____________________ known to me to be the _________________________of [__________], and acknowledged to me that he/she executed the same for and on behalf of [__________]. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year first above written. (SEAL) _________________________________________ (Printed Name Here) Notary Public for the State of ___________ Residing at _______________________ My Commission Expires:____________ (Use 4 digits for expiration year) THE CITY OF BOZEMAN ____________________________________ BY: JEFF MIHELICH, CITY MANAGER CITY OF BOZEMAN DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B STATE OF MONTANA ) :ss County of Gallatin ) On this _____ day of ________________ 20__, before me, a Notary Public for the State of Montana, personally appeared [Jeff Mihelich], known to me to be the person described in and who executed the foregoing instrument as City Manager for the City of Bozeman, whose name is subscribed to the within instrument and acknowledged to me that he executed the same for and on behalf of said City. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal on the day and year first written above. (SEAL) _________________________________________ (Printed Name Here) Notary Public for the State of Montana Residing at _______________________ My Commission Expires:____________ (Use 4 digits for expiration year) DocuSign Envelope ID: 30986597-FB60-4576-80D4-958E40F6AD8B